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This is the VOA Special English Economics Report.
On November thirtieth, the European Central Bank took action to support the worldwide financial system. Central banks in Britain, Canada, Japan, Switzerland and the United States also acted.
The banks made it less costly for other countries to borrow American dollars. The United States Federal Reserve said the joint effort was meant to help central banks in Europe provide financial support to nations that need it. The action sent American stock prices up more than three percent.
On December first, European Central Bank President Mario Draghi suggested that the ECB may provide new financial support for European countries struggling with debt. But first, he said, euro area countries must establish trust by enacting big financial reforms. He said: "A credible signal is needed to give ultimate assurance over the short term. What I believe our economic and monetary union needs is a new fiscal compact, a fundamental restatement of the fiscal rules together with the mutual fiscal commitments that euro area governments have made."
Seventeen members of the European Union share the euro currency. Concern over its future has been building in recent years. The Greek debt crisis, rescue loans for Ireland and Portugal and worries over Italy's debt have all increased fears that Europe may have to abandon the euro.
The euro is the world's second most traded and second most used reserve currency after the dollar.
European finance ministers failed to agree in November on a plan to provide economic support for debt-troubled countries.
Financial officials say a lack of economic and financial cooperation is at the heart of the two-year-old debt crisis. Dutch Finance Minister Jan Kees de Jager said there is a strong need for tougher rules: "Lack of economic reforms and lack of fiscal discipline has brought us into this crisis. So you also have to address these fundamental issues." That means euro nations may have to surrender some power over their budgets to the European Union.
